15  Competitive Neutrality

Guidance notes This section outlines the assumptions that form the Competitive Neutrality adjustment and explains the results. For further guidance on the application of competitive neutrality, refer to the relevant jurisdiction's Competitive Neutrality Policies

Competitive Neutrality (example)

Competitive Neutrality assumptions have been estimated by [insert name] and are based on the following:

•  Land tax was estimated at $0.01 million per year.

•  Local government rates were based on 0.87 cents per dollar of the value of the property.

•  Stamp duty was estimated at $0.3 million.

•  Payroll tax was based on 7 per cent of wages and salaries per year estimated at $0.4 million per year.

(Note these rates have been adopted in this example for illustrative purposes only.)

Table 15-1 details the NPC of the Competitive Neutrality adjustment.

Table 15-1: Competitive Neutrality adjustment (net presentation)

Cost item	NPC $m
Land tax	0.1
Local government rates	12.0
Stamp duty	0.3
Payroll tax	2.6
Total Competitive Neutrality	15.0

The Competitive Neutrality adjustment represents approximately 4.6 per cent of the non-risk-adjusted PSC. It shows that the majority of the adjustment relates to local government rates.